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komerican
Joined: 17 Dec 2006
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 Posted: Sun Sep 07, 2008 5:59 pm Post subject: Re: Is your money safe in a Korean Bank? |
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| GoldMember wrote: |
Don't intend to be alarmist, but this is a very serious question.
Consider the following facts.
1. Banks themselves, borrow by issueing securities on the international money markets. These securities are effectively never paid off. Once they mature, the banks issue new promissory notes to pay off the old promissory notes. A huge amount of these notes is due to mature soon. The Korean banks can't issue new notes to pay for the old ones as no one wants them. There is a strong chance they may default.
2. Banks have borrowed, billions via the Yen carry trade. The yen has recently been rising strongly, causing losses on those carry trades, forcing banks to either pay back their Yen denominated loans, or take a loss.
3. Deposits in banks are at record lows, due to smart Korean investors, investing in stable and safe investments such as Chinese and Indian stocks, often with borrowed money.
4. Poor lending practices and lack of transperancy. A bank that has 4% of its loan portfolio non performing is considered a very badly run bank. During the IMF crisis a Korean bank was found to have 80%!! of its loans non performing.
5. The Korean government can't bail out the banks, their up to their arm pits in debt, and sitting on a huge portfolo of non performing loans from the IMF days.
6. Banks are struggling to come up with foreign currency DESPITE the Bank of Korea, supposedly holding huge exchange reserves.
The Bank of Korea itself has huge debts, and it's so called foreign exchange reserves are in the form of non liquid, and rapidly depreciating, treasuries, and worthless collatorized mortgages.
My wife would get phonecalls DAILY offering her loans, those calls have recently mysteriously dried up.
Better to hit the bank now and get your cash, before there's a huge queue out side the front door.
Don't think these dudes learnt anything about sensible financial practices, from the IMF experience. |
Posts like this would be laughable if they weren't so sad. The financial mess in western banks is far far worse.
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attempt to stabilize financial markets and restore the faltering housing market, but it thrusts trillions of dollars of risk directly onto taxpayers' shoulders.
"The U.S. government has trillions of dollars of debt outstanding. With the takeover of Fannie and Freddie, the government will add trillions more to the burden, because the Treasury will, in fact, guarantee all the Fannie and Freddie debt," he said. |
http://www.usatoday.com/money/economy/housing/2008-09-07-fannie-freddie-plan_N.htm?csp=34
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GoldMember
Joined: 24 Oct 2006
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| Posted: Tue Nov 11, 2008 6:24 am Post subject: |
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The latest
SEOUL, Nov 11 (Reuters) - South Korean banks' capital ratio fell to the lowest in seven and a half years due to investment losses sparked by the global financial turmoil and an increase in risky assets, the financial regulator said on Tuesday.
The Financial Supervisory Service (FSS) said it would encourage banks to boost their capital and increase profits retained. It also called for banks to prepare for a possible rise in bad debt amid the economic downturn. The capital adequacy ratio guided by the Bank for International Settlements (BIS), a measure of banks' financial soundness, fell to 10.79 percent at the end of September, down from 11.36 percent at end-June, the FSS said.
It was the lowest reading for the quarterly data since end-March, 2001. At the end of 2007, the ratio stood at 12.31 percent.
Separate FSS data showed the ratio of bad debt to total loans at domestic banks rose to 0.81 percent at end-September from 0.70 percent at end-June.
"The ratio of bad debt is turning higher, although still at a low level, as the economy slows following the global financial crisis," the regulator said in a statement.
"(The FSS) will guide banks to dispose of non-performing debt, strengthen risk management and increase capital to prepare for a rise in bad debt."
To boost capital the FSS said banks would be encouraged to issue hybrid bonds and adjust dividend payments.
Hybrid bonds combine features of debt and equity, paying higher returns to investors than standard debt but ranking lower down the repayment chain than senior debt in a bankruptcy.
The BIS capital ratio represents the net worth of banks in the form of issued capital, retained profits and some hybrid debt divided by risk-weighted assets. Korean banks are usually expected to meet a 10 percent ratio to be considered healthy.
Of 18 domestic banks, including foreign-owned and state-run institutions, 11 saw their capital ratios fall from end-June. Kookmin Bank, Citibank Korea and the Export-Import Bank of Korea registered BIS capital ratios below 10 percent, according to the FSS. (Reporting by Rhee So-eui; Editing by Keiron Henderson and Jonathan Hopfner)
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSSEO15743720081111 |
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GoldMember
Joined: 24 Oct 2006
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cdninkorea
Joined: 27 Jan 2006
Location: Seoul
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| Posted: Thu Aug 20, 2009 3:29 pm Post subject: |
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| GoldMember wrote: |
| Oh that nasty GoldMember he's saying bad things about Korea's Financial system. What a racist! |
Okay, but I still haven't seen any Korean banks crash and everyone lose all their money. What happened to that? It's been two years since you made your dire predictions... |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Thu Aug 20, 2009 4:42 pm Post subject: |
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People aren't saying you're racist, they are saying you're clueless.
And so far, it looks like their predictions are quite accurate. |
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